QUESTION 2 (50 marks) On 31st January 2022, the directors of Isca Plc. were given the following Cash Flow Statement. They are confused as, despite making a profit and starting the year with a positive bank balance, Isca Plc has an overdraft. The directors do not understand what has happened during the year to cause this situation. Isca Plc. Cash Flow Statement for the year ended 31st January 2022 Cashflows from operating activities Operating profit Add: depreciation Working capital movements: inventories trade receivables trade payables Cash flows from operating activities tax paid Net cash inflow from operating activities 2,000 200 2,200 20,000 8,000 (30,000) 200 (500) (300) Cashflows from investing activities Purchase of plant sale of lorry interest received (45,000) 10,000 500 Net cash outflow from investing activities (34,500) Cashflows from financing activities Loan Interest paid 30,000 (2,000) Dividend payment (45,000) Net cash inflow from financing activities (17,000) Net decrease in cash (51,800) Cash balance at 1st February 2021 8,000 Cash balance at 31st January 2022 (43,800)